Type Of Chinese Economic Reform - 1278 Words

Type of Chinese economic reform Chinese economic reform is experimental, fast and upheaval. Reform and Opening-Up Policy is a significant policy in the Chinese economics reform. It was a turning point that Chinese economy got over the shock from the aggressive economic policies ahead and realized the economics renaissance gradually. One of the most important changes is in resource allocation. Now, resource allocation is mainly influenced by the market rather than the central planning. As the alternative mechanism, government interventions take place when the market mechanism is not enough to maintain the good performance of economy. Besides, China is opening to the outside world away from the closed and self-fettered condition. Four†¦show more content†¦The policy was planned to attract foreign investors. And it works very well now. The investment from overseas mainly contributes to key infrastructure sectors such as agriculture, forestry, energy, transport, and raw materials. The investment helps the national economy recovered from the economic depression in the long period of the Cultural Revolution and maintains a high rate of growth. Investment is recognized as an effective measure to maintain the economy stable and ease the unemployment rate if financial crisis happens. When the global economic crisis happened in 2008, Chinese government invested 4 trillion RMB for expansion of domestic demand because the government thought that rarely depending on export cannot develop economy anymore. The fact is, the financial crisis reduced the consumption capacity of developed countries and they decrease the import from China. So, it is very important for Chinese government to do the investment. This investment plays an essential role in the consequent good economic performance of China while a wide range of severe economic depression happened in the world. However, now, many people agree that that 4 trillion stimulus package is a overreaction for financial crisis and lead to detrimental consequences. Based on the data of National Bureau of Statistics of China, Investment Rate of China has fluctuated between 30% and 50% since 1978, much higher than responding world